Foreclosures as a percentage of sales are falling, but they’re still high in some states

Although the housing market has been slowly recovering, foreclosures are still plaguing some markets. There were 115,830 foreclosure filings in April 2014 or 1 in every 1,137, down 20% from 144,790 for the same period last year, according to data released Thursday by RealtyTrac, a real-estate data firm. But they were still persistently high in some states, including Florida and Maryland. Bank repossessions in April increased from the previous month in 26 states and were up from a year ago in 16 states, including New York (up 142%), Oregon (up 91%), New Jersey (up 58%), Illinois (up 55%) and Indiana (up 52%).

The good news: This is sign that those markets are working through the final remnants of foreclosures left over from the recent housing crisis and they will attract investors and first-time buyers who are willing to do some extensive renovations, says Daren Blomquist, vice president at RealtyTrac. “Many of these bank-owned homes are bottom-of-the-barrel properties in terms of location or condition, but they will provide some much-wanted inventory of homes for sale in some markets in the coming months.” Here are the five highest foreclosure rates for the first quarter of 2014:

Next: 5 states with the highest foreclosure rates:

— By Quentin Fottrell

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Florida: 1 in 129

Florida had the highest foreclosure rate in the U.S. in the first quarter of 2014. One in every 129 Florida homes had a foreclosure filing, down from one in every 104 for the same period last year, according to RealtyTrac. The court system in Florida was backlogged with foreclosure filings last year, according to Carey Frankel, a real-estate agent based in Ponte Vedra Beach, part of the metro area of Jacksonville. The process takes two years, he says. “The northeast Florida market still has a considerable number of homeowners that are underwater.”

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Maryland: 1 in 189

Maryland had the second-highest foreclosure rate, but the rate has increased sharply since the beginning of the year. One in every 189 housing units had a foreclosure filing in the first quarter versus 1 in 254 for the first quarter of 2013. “The foreclosures seem to be coming more frequently than we expected them to at the beginning of the year,” says Carlton Boujai, president of the Maryland Association of Realtors in Frederick, Md. “If they continue to come at this rate, I’m scared it could put a damper on our market. It’s been up and down for the last year. It’s still a buyer’s market.”

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Nevada: 1 in 224

There has been an increase in foreclosures in Nevada as foreclosures pass through the system: 1 in 224 residential sales was a foreclosure in the first quarter of 2014 versus 1 in 115 for the same period last year. In Las Vegas, the foreclosure rate ranges as low as 9% or as high as 12% in the market “and that’s a comfortable rate,” says Mark Stark, president and CEO of Berkshire Hathaway HomeServices Nevada Properties in Las Vegas. “Over the next 36 months, that percentage will dip as those properties are slowly but surely acquired,” he says. “But there’s not going to be any mass dumping of products onto the market. Each neighborhood is affected differently.”

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Illinois: 1 in 230

The rate of foreclosures is improving in Illinois, hitting 1 in every 230 residential sales in the first quarter of 2014 versus 1 in every 147 for the same period last year. “The inventory on foreclosures is dropping year over year,” says Andy Starck, owner of BHHS Starck Real Estate, Palatine, Ill. “We took in more new listings in April. Prices continue to rise by low double-digits in the Chicago area.” Starck doesn’t see that slowing this year. “We’re still playing catch-up with the rest of the country, especially after the harsh winter.” But he says 2013 was an “incredibly robust” year for comparison.

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New Jersey: 1 in 273

Around 1 in 273 sales in New Jersey were foreclosures in the first quarter, versus 1 in every 452 for the first quarter of last year. Foreclosure activity also increased 29% in April in New Jersey from a year ago — the fifth consecutive month with an annual increase, Blomquist says. One theory, says Walt Molony, spokesman for National Association of Realtors: Like Florida and Illinois, New Jersey is a judicial state; judicial foreclosure must go through the court system. In a non-judicial state, the lender might only notify the owners that they are in default before putting the home up for auction.

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